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Summary

For a brief or modular course covering business statistics and introductory topics in management science. Designed specifically for today's shorter courses, often found in MBA programs. This text covers the basic concepts of business statistics, data analysis, and management science in a contemporary spreadsheet environment. The authors emphasize practical applications of the approaches to business decision making.

Table of Contents

Preface

xi

PART I

Data and Business Decisions

1

(18)

The Importance of Data Analysis and Decision Modeling

2

(1)

Types and Sources of Business Data

3

(7)

The Tracway database

6

(4)

Measurement and Statistics

10

(3)

Populations and samples

12

(1)

Decision Models

13

(1)

Using Microsoft Excel

14

(3)

Excel add-ins: PHStat, Crystal Ball, and TreePlan

15

(1)

Working with data

15

(2)

Summary

17

(1)

Questions and Problems

18

(1)

Displaying and Summarizing Data

19

(38)

Displaying Data with Charts and Graphs

20

(10)

Column and bar charts

23

(2)

Line charts

25

(3)

Pie charts

28

(1)

Area charts

29

(1)

Scatter Diagrams

29

(1)

Summary of graphical display methods

30

(1)

Descriptive Statistics

30

(13)

Frequency distributions and histograms

32

(2)

Measures of central tendency

34

(2)

Measures of dispersion

36

(2)

Coefficient of variation

38

(1)

Measures of shape

38

(1)

Excel's descriptive statistics tool

38

(3)

Data profiles and proportions

41

(2)

Visual Display of Statistical Measures

43

(5)

Box-and-whisker plots

43

(3)

Stem-and-leaf displays

46

(2)

Statistical Relationships

48

(3)

Case Study: Using Descriptive Statistics for the Malcolm Baldrige National Quality Award

51

(3)

Summary

54

(1)

Questions and Problems

54

(3)

Random Variables and Probability Distributions

57

(40)

Basic Concepts

58

(5)

Probability

58

(1)

Random variables

59

(1)

Probability distributions

59

(3)

Expected value and variance of a random variable

62

(1)

Discrete Probability Distributions

63

(3)

Bernoulli and binomial distributions

63

(2)

Poisson distribution

65

(1)

Continuous Probability Distributions

66

(12)

Uniform distribution

67

(1)

Normal distribution

68

(3)

Triangular distribution

71

(1)

Exponential distribution

72

(2)

Probability distributions in PHStat

74

(1)

Other useful distributions

75

(3)

Random Sampling from Probability Distributions

78

(8)

Random numbers

78

(1)

Sampling from probability distributions

79

(1)

Sampling from probability distributions in Excel

80

(3)

Sampling distributions and sampling error

83

(3)

Summary

86

(1)

Questions and Problems

87

(2)

Appendix: Introduction to Crystal Ball

89

(8)

Specifying input information

90

(4)

Crystal Ball output

94

(3)

Sampling and Statistical Analysis for Decision Making

97

(43)

Statistical Sampling

98

(5)

Sample design

99

(1)

Sampling methods

100

(2)

Error in sampling

102

(1)

Sampling from finite populations

103

(1)

Statistical Analysis of Sample Data

103

(1)

Estimation

103

(8)

Point estimates

103

(2)

Interval estimates

105

(1)

Confidence intervals for the mean

106

(4)

Confidence intervals for proportions

110

(1)

Confidence intervals and sample size

110

(1)

Hypothesis Testing

111

(14)

Hypothesis formulation

112

(1)

Significance level

113

(1)

Decision rules

114

(2)

Using p-values

116

(3)

Two-sample hypothesis tests for means

119

(1)

F-test for testing variances

119

(3)

Tests for proportions

122

(2)

Other hypothesis tests

124

(1)

Anova: Testing Differences of Several Means

125

(2)

Chi-Square Test for Independence

127

(2)

Summary

129

(2)

Questions and Problems

131

(2)

Appendix: Distribution Fitting

133

(7)

Distribution fitting with Crystal Ball

137

(3)

Statistical Quality Control

140

(27)

The Role of Statistics and Data Analysis in Quality Control

141

(1)

Statistical Process Control

142

(10)

Control Charts

143

(1)

x-and R-charts

144

(4)

Analyzing control charts

148

(4)

Control Charts for Attributes

152

(2)

Statistical Issues in the Design of Control Charts

154

(1)

Process Capability Analysis

155

(2)

Summary

157

(1)

Questions and Problems

158

(9)

PART II

Regression

167

(36)

Simple Linear Regression

170

(3)

Least Squares estimation

170

(3)

Measuring Variation about the Regression Line

173

(5)

Coefficient of determination and correlation coefficient

176

(1)

Standard error of the estimate and confidence bands

176

(2)

Regression as Analysis of Variance

178

(3)

Assumptions of Regression Analysis

181

(1)

Application of Regression Analysis to Investment Risk

182

(3)

Multiple Linear Regression

185

(3)

Interpreting results from multiple linear regression

187

(1)

Building Good Regression Models

188

(3)

Using Adjusted R+2 to evaluate fit

188

(1)

Correlation and multicollinearity

189

(1)

Best subsets regression

190

(1)

Regression with Ordinal and Nominal Independent Variables

191

(3)

Regression Models with Nonlinear Terms

194

(4)

Summary

198

(1)

Questions and Problems

199

(4)

Forecasting

203

(31)

Qualitative and Judgmental Methods

204

(5)

Historical analogy

205

(1)

The Delphi method

205

(1)

Applying the Delphi method

206

(2)

Indicators and indexes

208

(1)

Statistical Forecasting Models

209

(11)

Moving average models

210

(2)

Error metrics and forecast accuracy

212

(4)

Exponential smoothing models

216

(1)

Incorporating trend and seasonality into exponential smoothing models

217

(3)

Regression Models

220

(3)

Incorporating seasonality in regression models

222

(1)

The Practice of Forecasting

223

(3)

Summary

226

(1)

Questions and Problems

227

(2)

Appendix: CB Predictor

229

(5)

Selection Models and Risk Analysis

234

(42)

Decision Criteria and Selection

235

(14)

Decisions involving a single alternative

236

(1)

Sensitivity analysis

237

(2)

Decisions involving mutually exclusive alternatives

239

(2)

Decisions involving nonmutually exclusive alternatives

241

(1)

Decisions involving uncertainty

242

(7)

Monte Carlo Simulation for Risk Analysis

249

(4)

Applications of Monte Carlo Simulation

253

(6)

Project management

253

(4)

Budget-Constrained product selection

257

(2)

Case Study: Simulation and Risk Analysis in New Product Screening at Cinergy Corporation